Renters of color pay security deposits more often than white renters, and the deposits they pay are typically $150 higher, according to Zillow’s Consumer Housing Trends Report.
Black and Latinx renters report submitting more applications than white and Asian American and Pacific Islander renters. The typical white or Asian American and Pacific Islander renter submits two applications, while the typical Black or Latinx renter submits three.
The U.S. rental market is as competitive as it’s been in decades, with the national vacancy rate lower than at any time since 1984. Rent prices have skyrocketed, up a record 17% in just the past year, prompting some priced-out renters to look for a more affordable home when their lease expires. About 9 in 10 renters paid a security deposit last year, with the typical deposit coming in at $700. A higher share of renters of color paid a deposit (93%) than white renters (85%), and the median amount paid by renters of color was higher, too — $750, compared to $600.
A $750 security deposit represents a significant amount of a typical renter’s wealth. Zillow’s research indicates a typical renter holds $3,400 total across savings, checking, retirement and investment accounts. More than one-third (38%) of renters surveyed say they couldn’t cover an unexpected expense of $1,000.
In addition to facing higher and more frequent security deposits, renters of color report submitting more applications and paying higher fees for those applications than white renters. In 2021, 61% of all renters applied for two or more properties — an 11-point increase from 2019 and five points higher than in 2020, likely owing to the tight rental market. The typical white or Asian American and Pacific Islander renter submits two applications, while a Black or Latinx renter typically submits three. More than one-third of renters of color submit five or more applications during their home search: that’s true of 38% of Black and Latinx renters, 33% of Asian American and Pacific Islander renters, and only 21% of white renters.
With a median rental application fee of $50, the cost can add up quickly if renters need to apply for several properties. The burden is often greater for renters of color, who report paying a higher median application fee than white renters, on top of usually needing to apply to more rentals. Among renters who paid an application fee for the home they rent, the typical white renter reports paying $50, while a typical Black renter paid $65, a typical Latinx renter paid $80 and a typical Asian American and Pacific Islander renter paid $100.
The higher fees and number of applications for renters of color are likely partially attributable to their age, income and geography. The typical renter of color is two years younger than the median white renter, meaning two fewer years of potential income growth. White renters are also more likely to rent in rural markets and the Midwest, both of which are generally less expensive. Asian American and Pacific Islander and Latinx renters, in particular, are more likely to rent in the West, which includes many of the country’s most expensive and competitive rental markets.
Expanding access to credit could help improve outcomes for Black and Latinx renters. Nearly half of white renters (46%) say they were completely certain they would qualify for a rental, compared to 38% of Latinx renters and 34% of Black renters. Credit checks are part of many rental applications, and Black and Latinx adults are more prone to being credit invisible and more often live in counties with higher levels of credit insecurity.
